A sharp fall in the price of crude oil sent FX traders flocking to the safe haven currencies which sent the Japanese Yen surging. Also adding to the flight to safety are mounting worries over the strength of the world's economy, uncertainty over the upcoming Greek election and growing deflationary fears for the Eurozone.

According to one currency strategist, the drop in oil prices has led investors to the conclusion that demand is lacking, further implying that global growth is waning. However he cautions that this increase in risk aversion could be a temporary blip that is likely to evaporate once the dollar recovers versus the Japanese Yen.

As reported at 9:13 am (GMT) in London, the USD/JPY was trading at 118.65 Yen, well off last month's 7-year high at 121.86 Yen. The USD/CHF also dipped, and is now trading at 1.00655 Swiss Francs. The EUR/USD remains close to yesterday's 8-year trough at $1.1935, and analysts say that the Euro will remain under pressure until after the Greek election when rumors of Greece's withdrawal from the Euro-area are either confirmed or quashed.

Oil Prices Send Loonie Lower

The fall in oil prices impacted commodity-linked currencies including the Canadian Dollar; the USD/CAD pair was trading at C$1.1765, close to Monday's 5½ year trough. Though the AUD/USD and the NZD/USD had earlier edged higher, analysts point out that global growth worries are likely to continue to have a negative effect on the Aussie and Kiwi Dollars.